Launched as a competitor to the
Australian Securities Exchange
last year, Chi-X is majority owned by Instinet Global, a subsidiary of Japan’s Nomura Holdings, and both Nomura and Instinet trade shares on Chi-X. David Trude, an independent director of the Chi-X board, is also the chairman of sharebroking firm EL&C Baillieu.

A similar review by ASIC of the ASX earlier this year led to an agreement that the ASX would improve its disclosure of how it manages potential conflicts that may arise from the fact that its chief executive,
Elmer Funke Kupper
, is also a member of the Tabcorp board.

Regarding its Chi-X report, ASIC said: “Our review did not identify any significant areas of concern in relation to Chi-X’s arrangements for handling the potential conflicts arising from the market participation of the Australian operations of Chi-X Global’s shareholders. Nevertheless, we believe that Chi-X could further enhance its conflict-handling arrangements."

The report is ASIC’s first detailed review of Chi-X since its launch in October 2011.

Chi-X has agreed to outline on its website any potential or perceived conflicts of interest along with details of how it will manage them.

This will include its dealings with Nomura and Instinet and its conflict-handling arrangements in relation to Mr Trude.